By on April 2, 2012

With membership down to a quarter of the union’s peak size in 1979, dues are not enough to pay the bills at the UAW. The UAW continues to tap into savings to pay for its day-to-day operations, Reuters says.  

According to the UAW’s annual financial filing with the U.S. Labor Department, 16 percent of the UAW’s cash receipts came from investment and asset sales in 2011, while union dues represented 47 percent.

The UAW’s membership increased slightly by 4,107, or 1 percent, to 380,719 last year. The UAW is still America’s richest union, but most of its $1 billion plus wealth is tied up in its strike fund. “As a result, the UAW was forced to sell stocks, bonds and other assets to pay for its day-to-day operations during the most recent U.S. economic downturn as the number of dues-paying members fell,” Reuters says.

Even after adding new members, the UAW is forced to rely on investment sales to pay for day to day operations. Organizing the transplants is key to the UAW’s survival. Failure to do so will result in more money drainage. Already, the balance sheet looks lopsided:

The UAW reported assets of $1.04 billion in 2011 and liabilities of $7.1 billion. Cash receipts and disbursements both fell about 6 percent to roughly $258 million each.

 

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28 Comments on “UAW Lives Off Its Savings...”


  • avatar
    Robert.Walter

    This has been going on for a few years now (as evidenced by the sale, or attempted sale, of its Black Lack retreat center…

    There seems to be no realistic plan to deal with the situation, besides more cold hope and hot rhetoric … and in the meantime, rather than get its cash burn under control, the union continues to devour its seed corn…

    Is the union management exempt from the concept of fiduciary responsibility?

  • avatar
    Sgt Beavis

    I wonder if they’ll make an attempt at raiding the funds in the VEBA. It wouldn’t surprise me if they at least tried to do so.

  • avatar
    rpol35

    “Organizing the transplants is key to the UAW’s survival”

    It has been tried many times before and failed (Nissan at Smryna comes to mind). I think it unlikely that it will change in the future.

    Probably all the more reason that Fiat will keep its N.A. operations out of the U.S. for fear of UAW “bleed over” from the Chrysler Group.

    • 0 avatar
      icemilkcoffee

      “the more reason that Fiat will keep its N.A. operations out of the U.S. for fear of UAW”

      Isn’t Fiat unionized in Italy?

      • 0 avatar
        Robert.Walter

        Yes, and this is the reason that Sergio keeps ringing the bell about over-capacity, so that one day when he does something about it, i.e. closing more Italian production capacity, nobody will be able to say (although they will) “you never warned us…)

  • avatar
    jaje

    You’d figure the UAW would change their management structure and take pay losses to compensate for the reduced numbers of members and the economy and cuts their members took. When the time comes maybe the UAW can have a Gov’t funded bankruptcy as well.

    • 0 avatar
      BigFire

      The were counting on Obama to force transplant plants into adapting UAW. Afterall, they did get that big save from Obama on the whole Government Motors thingie.

      • 0 avatar
        highdesertcat

        That is a hard-sell since the transplant workers have seen for themselves what the UAW has done to the domestic automakers in America; two are dead and had to be bailed out, and one was just barely hanging on by its teeth and is hocked up to its blue oval.

        Not exactly an ideal prospect for organizing labor, eh? Organize and have the UAW bargain you out of your job and bankrupt your employer.

        And let’s not forget the Job Bank, all that skilled labor… that had to go. Seems like the domestic car makers are actually doing better without that Job Bank, eh?

        Keep pushing the transplants! Maybe they’ll pick up their toys and head south to Mexico, like Mazda is doing.

      • 0 avatar
        jaje

        @BigFire…You sound like one of those people who only get their “facts” from Fox News Channel. Nice job on adding intelligent discourse.

      • 0 avatar
        VanillaDude

        Yeah – don’t counter a point of view – accuse them of getting their information from Satan. That’ll counter their argument. Keep believing that, btw. Just don’t be on my debating team, OK?

      • 0 avatar
        jaje

        @VanillaDude – Sounds like the rhetoric you get from Fox. Just like the opposite from MSNBC. You know cable news shows that have to fill in 24 hours of news with their own versions of the news or “facts”. Look at his/her other post in the VW UAW as it is verbatim that it is always Obama’s fault.

  • avatar
    icemilkcoffee

    “Selling investments” makes it sound like they are eating their seed corn. But that in itself doesn’t tell you anything. They could have sold some stocks and bought some other stocks just like any other institutional investors.

    Also- selling assets sound like a prudent thing to do. If their membership has fallen 75% from its peak, it would make sense for them to sell off the union halls that are no longer needed, etc.

  • avatar
    alluster

    The headline should be changed to: UAW lives off its saving and once depleted will soon be living off our savings.

  • avatar
    gslippy

    This is the hallmark of a dying organization.

  • avatar
    mfgreen40

    Why not raise the dues?

  • avatar
    Contrarian

    Someone hammer a wooden stake in it.

  • avatar
    Mark MacInnis

    Two questions:

    1. Shall we start a UAW Deathwatch? It’d be great if we could get Farago to drop by and “guest-write” for it….

    2. Does this mean they won’t be donating to the Obama/DNC re-election campaigns?

    I suspect the answer to both is “No!”…. I imagine these people are like cockroaches….not easy to get rid of.

  • avatar
    50merc

    “The UAW reported assets of $1.04 billion in 2011 and liabilities of $7.1 billion.”

    What??? The UAW’s balance sheet shows six billion of negative equity? How can that be? A few years ago I started hollering about GM’s inevitable bankruptcy filing because the company was already insolvent (liabilities greater than assets) and unable to reverse the downward spiral. It was selling profitable divisions to subsidize the unprofitable divisions–a poor long-term strategy. I couldn’t see how the auditors could call GM a “going concern”.

    Now it looks like the UAW is a GM copycat.

    • 0 avatar
      bumpy ii

      I would assume that most of that liability is a summation of long-term retirement benefits paid out on a planned schedule. GM’s problem was that its daily spending was more than the product was bringing in.

  • avatar
    PintoFan

    Yet another unpleasant side effect of the neocolonial economic strategy pursued in this country since around 1982.

    • 0 avatar
      geeber

      This is the result of COMPETITION, and the failure of management, and, to a lesser extent, union leadership, to realize that Toyota had a much better way to design and build vehicles. Toyota and Honda have been whipping the Big Three in passenger cars, minivans and crossovers since the early 1980s. Since that time, an increasing number of customers have realized this.

      Unless someone is going to argue that a Malibu is a better vehicle than a Camry, which should be entertaining, to say the least.

      Blaming this on Ronald Reagan is just plain silly. The UAW and management have no one to blame but themselves for this mess.

    • 0 avatar
      VanillaDude

      How much did you pay someone to teach you that lame brained drivel?

      Get your money back. It’s worthless.

  • avatar
    noxioux

    Hmmmm. . . Bloated organization living far beyond it’s means? Burn through your savings and max out those cards. Declare bankruptcy and hold your hand out for free money. Seems to be working for everyone else in this country.

    For now.


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